Feds probe JPMorgan interference in Madoff case

JPMorgan and federal regulators are on the verge of a $2 billion settlement, reports CNBC's Scott Cohn.

U.S. authorities are investigating whether JPMorgan Chase tried to impede their investigation of the Bernard Madoff Ponzi scheme, CNBC has learned.

The bank is in the final stages of negotiating a $2 billion settlement involving a variety of allegations of misconduct in its role as Madoff's primary banker, according to sources. But before the settlement talks took hold in recent weeks, the bank was aggressively fighting regulators' requests for information.

That included contesting an administrative subpoena issued earlier this year by the Treasury Department Inspector General's office.

"This office was looking into allegations made by JPMC's regulator, the Office of the Comptroller of the Currency (OCC) that its oversight of the bank was being impeded, specifically with respect to the bank's provision of banking services to Madoff," said Richard Delmar, counsel to Treasury Inspector General Eric Thorson, in an e-mail to CNBC.

"Our dealings with the bank culminated in our issuance of an administrative subpoena, which the bank contested," Delmar said.

Late this summer, the Inspector General's office asked the Justice Department to help enforce the subpoena, but the department, by then far along in its own investigation, declined.

The Justice Department, OCC and JPMorgan Chase have all declined to comment on the settlement talks, which sources say could be wrapped up by year's end.

A JPMorgan Chase spokesperson declined to comment on whether the bank tried to impede regulators. In its annual report earlier this year, the bank said it is "responding to various governmental inquiries concerning the Madoff matter."

It is not clear whether the investigation has uncovered actual evidence that the bank tried to impede regulators, but the Inspector General's office said its probe included testing assertions made by Madoff.

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